MAKING THE CASE FOR LIVING WAGE

For too long economic development in Wales focused on maximising our potential as a ‘low wage economy’ this short sighted strategy was never going to work in a globalised world where manufacturing and assembly work could be easily completed in the developing world. The two weeks from Monday 24^th March onwards are ‘Fair Pay Fortnight’ and Plaid has rightly repeated the call for the implementation of a living wage to lift thousands people out of poverty. The economic weakness of our economy has been highlighted by TUC research which shows the expanding pay gap between Wales and London. New research from the TUC shows that between 2000 and 2013, the pay gap between the top 10% of earners in London and the bottom 10% in Wales rose by 9.8%. Our economy has periodically struggled because of a combination of poor decision, poverty of ambition and ill-thought out public procurement policies none of which has helped when it comes to sustainable economic development. Plaid Cymru’s priority rightly focuses on rebooting and redeveloping the Welsh economy, part of this can be achieved by transforming Wales from a low-wage economy to a higher wage economy by developing high-skilled, well-paid jobs. 

A WIN WIN FOR WALES

There is much to commend Plaid Cymru’s Plan C which concisely and clearly identifies the linked nature of economic renewal and economic recovery necessary to get our country back on its feet economically.  Simply relying on the failed models of economic development and redevelopment to get our country out of the economic hole that we are in just won’t work. We need to change Wales and break the link with the economic consequences of the financial crisis which was largely caused by the banking sector.

What Plan C offers is realistic achievable alternative to the years of economic stagnation and austerity which are all that’s being offered by the Westminster based political parties. One way that the Welsh government can make a real and lasting economic difference is by maximising the economic opportunities offered to  Welsh businesses via its procurement policy.

A ‘buy local’ campaign is a real economic must, this will necessitate legislation to improve public procurement, something that can provide real opportunities for Welsh based business within the procurement chain – potentially this could create some 50,000 new jobs. Significantly improved local procurement policy can create and secure jobs, boost employment levels and help small to medium sized enterprises in many of our communities.

At a very basic level it comes down to maximising the local economic opportunities from the £ 4.3 billion pound public sector spend in Wales – which is used to procure and purchase goods and services.  There have been some real improvements when it comes to public procurement over the last ten years, but, there is still room for substantial improvements to be made.  The increase in Welsh procurement of goods and services from 34% in 2003 to 52%  (June 2012) something that follows extensive efforts by Plaid Cymru as part of the One Wales government (between 2007 and 2011).

If we are going to spend public money then we need to work it hard and maximise the economic impact every penny and every pound and to make sure that it works to help the Welsh economy. At present for every £2 spent procuring goods and services, £1 of that immediately ‘leaks’ out of Wales.  Value Wales has suggested that for each 1% increase in goods or services procured from Wales, around 2,000 jobs are created.

So if we can achieve a local public spend of something close to 75% then potentially some 46,000 additional jobs can be created. The impact of a well thought out and implemented public procurement policy is something that could economically give and give again. This is the crux of the matter, it could be a real win win situation for Wales, potentially cutting unemployment by around a third or about the same number as the increase in unemployment that we have suffered since the recession began.

Before people kick off and say that the setting targets is ruled out by European Union regulations, there is a enough freedom of action to significantly increase procurement from firms (based in our country) to 75% within the existing rules. There are more than enough examples of this from elsewhere in Europe where in Germany and France some 98% of the value of public contracts are won by companies within their borders.

The 2012 McClelland review shows what can be accomplished with good examples of best practice.  The review recommended legislation to ensure that public bodies involved in the public procurement process are required to appoint specialist procurement officers, and that Welsh Government guidelines are followed.

We have some excellent examples of public procurement including the Arbed scheme to improving housing energy efficiency where 41 of the 51 companies involved in the scheme (80%) were based in Wales. Other good examples are the Church Village and Porthmadog bypass contracts which were agreed when Ieuan Wyn Jones was Economy and Transport Minister where local training clauses were used to good effect.

Local procurement and business opportunities can be boosted encouraging contracts that are ‘small’ and ‘unbundled’ as well as maximising opportunities for consortia of small local firms to bid for larger contracts. Better thought out public procurement contracts can include public benefit clauses which can boost the chances of local firms winning bids and contracts rather than ending up automatically rejected or excluded from participating in the procurement process.

There is no reason why commitments to local training, carbon footprint reduction and the use of the Welsh language cannot be built into public procurement contracts where they are appropriate. There could be a knock on effect from all of this aside from local economic gains as the investment in skills and companies will provide spin-offs across the country delivering improved employment rates. More jobs and more secure jobs will boost wages as business success grows there will be more opportunities for better training and improved business practices.

MAKING LOCAL GOVERNMENT WORK FOR WALES

Let's be brutally honest many of our smaller communities, our small and large towns and our cities have suffered in the past from ill-thought out developments and questionable short term economic thinking. Our local small to medium retailers, local businesses and local consumers have suffered accordingly and we the consumers have paid the price with a loss of local services and choice.

Many people have real and serious concerns about the economic future and the character of their communities. We need to ask ourselves some serious questions about who these decisions in relation to redevelopment are being made for? And do our communities really benefit, locally or otherwise, certainly at times it is not us the customers? In the not so recent past local government has hindered economic growth and has damaged the economic vitality of our communities, but, it does not have to be this way.

One way that local government can help, rather than hinder, our small to medium sized enterprises and our communities is by improving procurement practice something that helps create and sustain local jobs. Plaid has called for legislation to be used to ensure that Welsh public sector contracts are allocated wisely to maximize job creation and investment opportunities here in Wales. The Welsh Government has previously announced a National Procurement Service, Plaid Cymru has rightly warned that unless further concrete action is taken then we in Wales will see savings but we will not see the full benefits.

The Party of Wales leader Leanne Wood said:

“Procurement is one of the successes of the National Assembly. By ensuring that Welsh public money is spend in the Welsh economy then we can create and support employment. A Plaid Cymru government would work towards achieving a target of 75% local procurement in Wales because we know that this could create 46,000 jobs here. That would make a huge dent in the unemployment figures.

“Spending that money with local companies in our local communities can also have a significant knock-on investment effect. By creating the demand we will also be improving the skills of our workforce, will be increasing the number of jobs, and will be supporting our local and national economies.

“Many businesses have told us that the process of bidding for work needs to be simplified, and for that reason, at a local government level in particular, we have argued for contracts to be unbundled. We have also worked to remove barriers to make it easier for small, local firms to apply for contracts. It’s about supporting our companies and sustaining our economy.

“Procurement is one way in which Plaid Cymru has made a real difference to employment levels and economic performance, and we will continue to make the case for ensuring that the money of Welsh taxpayers is used as wisely as possible, for the sake of our communities.”

WHAT'S NEXT FOR OUR FARMERS?

With the election over few politicians will be out chasing the farming vote or chasing farmers for that matter. Will Carwyn's Labour lot even try to appear to be the farmers friend or stand up for Wales? Our farmers, despite mutterings to the contrary, are not merely seeking the annual brown envelope from Brussels but for real opportunities to make a living (and a contribution) within the agricultural sector - they need a fair deal.

We in Wales still need take more practical steps to give Welsh farmers a fighting chance of making a real living; the aim of securing 80% of publicly procured food locally by 2015 should still a realistic and practical aim. This is something that could provide the first practical step towards helping Welsh farmers and other producers make the most of the new opportunities that will arise from higher public purchasing of local products.

Our farming communities, still feel pretty isolated and marginalised, the contempt with which the farmers had been treated in the past by Labour and Conservative Governments in Westminster and even in Cardiff Bay prior 2007 used to mirror the neglect of the important agricultural sector, which despite everything still makes a significant contribution to our rural economy.

Any economic failure across the farming sector could (and did) have a massive knock on effect for dependent small businesses and suppliers across the whole rural economy, in the small towns and across the Welsh countryside itself; which is as the living landscape is a result of generations of ongoing hard work by our farming community.

In the past both Labour and Conservative Governments in Westminster (and Cardiff Bay) treated the agricultural sector with indifference. It is vitally important that this attitude at all levels of Government become a thing of the past; much more effort has to be made to market first class Welsh produce within the UK, in Europe and beyond.

We should not forget, that in the 1980's it was a Tory Secretary of State who literally sat on his hands and quietly did nothing when the Welsh Dairy farmers got hammered into the ground by cuts in the milk quota. Never again must any Welsh Minister fail to stand up and be counted and to fail to argue their corner on behalf of Welsh farmers.

That changed with the arrival of Plaid's Elin Jones (who became the One Wales Government Minister for Rural Affairs) - she hit the ground running and was not afraid to meet with and stand up for our farmers and fight for their their interests - this made an immensely refreshing change from what has gone on before. The question is what or who will happen next?